Cargill refinery plans underline bright future

By Anthony Fletcher

- Last updated on GMT

Related tags Sugarcane Cargill

Cargill's plan to construct a million-ton-per-year sugar refinery
on the Mexican Gulf would represent an enormous boon to the
regions' hurricane-hit food industry.

Cargill Sugar North America intends to join forces with Louisiana Sugar Cane Products (LSCPI) to build the facility at Cargill's Terre Haute Marine Facility in Reserve, Louisiana.

Under the scheme, LSCPI would provide the entire raw sugar production from its 10 sugar cane mills - about 800,000 tons per year - once it becomes operational. Cargill would then sell and distribute refined sugar products from the joint venture to food and beverage customers.

The project would be of enormous boon for the region, which was devastated by hurricane Katrina. Infrastructure was simply swept away and there were fears that the gulf region, one the country's most important food storage and transportation points, would never recover.

Prior to the devastation, about $150 billion worth of cargo was shipped every year through the region's seaports, accounting for about one-fifth of all US imports and exports.

For Cargill, this would be the third marketing alliance with US sugar producer groups in the past three years, but the first involving cane growers and millers. Cargill's other US sugar marketing alliances are with the Southern Minnesota Beet Sugar Cooperative and Wyoming Sugar Company.

"The joint venture will allow Cargill to extend its full service sweetener capabilities to a whole new geography,"​ said Cargill Sweeteners North America president Pat Bowe.

"In addition to the prospect of expanding the range of customers we can serve, we're thrilled at the opportunity to contribute to Louisiana's economic rebirth in the aftermath of Hurricane Katrina with an investment that goes beyond rebuilding to real expansion."

The strategy also follows solid results. The company reported sales of $504 million for the first quarter ended 31 August, up 2 percent from a year ago.

Groundbreaking for the refinery is expected to take place in spring 2006 and production would commence by early 2008. The project is subject to completion of definitive agreements and corporate approvals by Cargill and LSCPI.

"We look forward to working with Cargill in this venture, which will allow the mills and the growers to participate in a value added chain from the fields of Louisiana to American consumers,"​ said Mike Daigle, board chairman of LSCPI.

"This is the most significant new enterprise in the history of the Louisiana sugar cane industry."

LSCPI is a cooperative representing 10 cane mills and their 700 growers. LSCPI markets about 75 percent of the raw sugar produced in Louisiana.

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